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5 reasons why GM is cutting jobs, closing plants in a healthy economy

DETROIT — Even though unemployment is low, the economy is growing and U.S. auto sales are near historic highs, General Motors is cutting thousands of jobs in a major restructuring aimed at generating cash to spend on innovation. It's the new reality for automakers that are faced with the present cost of designing gas-powered cars and trucks that appeal to buyers now while at the same time preparing for a future world of electric and autonomous vehicles. GM announced Monday that it will cut as many as 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles. The reductions could amount to as much as 8 percent of GM's global workforce of 180,000 employees. The cuts mark GM's first major downsizing since shedding thousands of jobs in the Great Recession. The company also said it will stop operating two additional factories outside North America by the end of next year. The move to make GM get leaner before the next downturn likely will be followed by Ford Motor Co., which also has struggled to keep one foot in the present and another in an ambiguous future of new mobility. Ford has been slower to react, but says it will lay off an unspecified number of white-collar workers as it exits much of the car market in favor of trucks and SUVs, some of them powered by batteries. Here's a rundown of the reasons behind the cuts: Coding, not combustion CEO Mary Barra said as cars and trucks become more complex, GM will need more computer coders but fewer engineers who work on internal combustion engines. "The vehicle has become much more software-oriented" with millions of lines of code, she said. "We still need many technical resources in the company." Shedding sedans The restructuring also reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago. GM is shedding cars largely because it doesn't make money on them, Citi analyst Itay Michaeli wrote in a note to investors. "We estimate sedans operate at a significant loss, hence the need for classic restructuring," he wrote. The reduction includes about 8,000 white-collar employees, or 15 percent of GM's North American white-collar workforce. Some will take buyouts while others will be laid off.

GM profit dips on truck changeover, but beats estimates

DETROIT — General Motors on Thursday reported a higher-than-expected quarterly profit despite a drop in production of high-margin pickup trucks, as it gears up for new models that are expected to boost profits next year. Like rivals Ford and Fiat Chrysler Automobiles, GM is banking on highly-profitable Chevy Silverado and GMC Sierra pickup trucks to lift profits, as consumers shift away from traditional passenger cars in favor of these larger, more comfortable trucks, SUVs and crossovers. During the first quarter, the process of changing over to GM's new pickups resulted in a drop in production of 47,000 units. GM Chief Financial Officer Chuck Stevens said the production drop had resulted in a drop in pre-tax profit of up to $800 million. Earlier this year, GM said its 2018 profits would be flat compared with 2017, but expected its all-new pickup trucks would boost margins starting in 2019. On Thursday, GM reiterated its full-year 2018 forecast for adjusted earnings in a range from $6.30 to $6.60 per share. The automaker said capital expenditures were more than $500 million higher in the quarter because of investments its new pickup trucks and a family of low-cost vehicles under development with Chinese partner SAIC Motor Corp. On Wednesday, rival Ford said it would stop investing in most traditional passenger sedans in North America. CFO Stevens told reporters on Thursday that GM has "already indicated that we will make significantly lower investments on a go-forward basis" in sedans. 2019 GMC Sierra View 21 Photos GM benefited from a lower effective tax rate in the quarter, but adjusted pre-tax margin fell to 7.2 percent from 9.5 percent a year earlier. Stevens said the company's profit margin should hit 10 percent or higher in the second quarter and for the full year. GM said material costs were $700 million higher in the first quarter, and it expects those costs to continue rising. The automaker said it would counter those increases with cost cutting measures. "It is a more difficult environment than it was three or four months ago," Stevens said when asked about rising commodity prices from potential steel and aluminum tariffs announced by the Trump administration. "But we are confident we can continue to offset that." The company reported quarterly net income of $1.05 billion or $1.43 per share, a drop of nearly 60 percent from $2.61 billion or $1.75 per share a year earlier. Analysts had on average expected earnings per share of $1.24.

Recharge Wrap-up: meet the Luka EV project, VisibleTesla allows Model S hacking

Select Registry is partnering with Tesla to install chargers at many of its lodgings. More than 170 hotels, inns and bed & breakfasts will install Tesla High Power Wall Connectors for their guests to use. So far, 63 properties have installed the chargers. Eventually, Select Registry members in 34 states as well as Nova Scotia will offer charging on-site. Tesla's wall charger provides the Model S with 58 miles of range per hour. The hotels will rent you a room for the full night, as well. Read more in the press release below. Tesla Model S owners can hack their car with the VisibleTesla app. The free, open source app allows users to check on and control the status of the car and its subsystems, similar to Tesla's official apps. VisibleTesla can also be used to schedule certain automated commands. For example, its creator, Joe Pasqua, has his car send him a text message reminding him to bring his bags with him when he enters the grocery store parking lot. Other users have the car remind them if the car is not charging at a certain time, or schedule the car to turn on the heat before departure. Read more at TechWorm, or learn more at the VisibleTesla website. Georgia Power has added 32 Chevrolet Volts to its fleet. Employees, particularly the utility's energy efficiency experts, will use the cars to travel to customers' homes and businesses to conduct energy audits. "We are leading by example and demonstrating to our customers, and other Georgia businesses, that electric transportation works for all drivers," says Georgia Power Chairman, President & CEO Paul Bowers. Georgia Power also offers charger rebates and special rates for EV customers. Read more at Domestic Fuel. The Luka EV is a project to build an affordable, lightweight, retro-looking, road-legal electric car in one year. The team wants to get the car certified for use on EU roads by September 2015. They have goals of achieving a driving range of 300 kilometers (about 186 miles), keeping the cost under ˆ20,000 (about $22,280 US at current rates) and the weight under 750 kilograms (about 1,650 pounds). The builders recently completed their first range test of the working vehicle, which uses in-hub motors for propulsion. Learn more at the Luka EV project page on Hackaday. Select Registry Teams with Tesla Motors Both Tesla owners and their vehicles can recharge at more than 170 B&Bs, inns, and hotels throughout the U.S.